Introduction business to other countries.One of the examples

Introduction

Many of Businesses in
America make detailed assumptions about the potential of expand their business
to other countries.One of the examples of the outcome to intercultural business
is Disney Corporation’s European attempt. Euro Disney has
a very difficult beginning experience in France. Due its
lack on accurate information about the French and European preference and
culture, further on their inability on forecasting external problems and
inability on controlling both controllable and uncontrollable forces, Disney
acquired a huge debt. Instead of analyzing and learning from its potential
customers Disney chose to make assumptions, turned out that most of those
assumptions were wrong.

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Euro Disneyland

First
park of Disneyland opened in Anaheim, California, in 1955. Until 1992, the
Walt Disney Company had experienced nothing but success in the theme park
business. Following
on from the success of the Disneyland theme park in Anaheim, Florida &
Tokyo, Disney plans to build a European version first started around 1975, nine
years after Walt Disney died. Initially Britain, Italy, Spain and France were
all considered as possible locations. France was the best choice for Euro
Disney, because it presented the best geographic location and also had many
incentives from the French Government, cheap land, easy bank loans, and more
than $1billion in incentives. Eventually the French location won, and a site
was duly investigated at Marne-la-Vallee, partly because of its close proximity
to Paris, and also its central positioning within Western Europe. A factor that
was thought to be crucial to the park’s future success if it was to attract
sufficient visitors. The proposed location put the park within 4-hours drive
for around 68 million people, and 2 hours flight for a further 300 million or
so. On March 24, 1987 Disney signs an agreement with the French authorities to
create Euro Disney in France for the building of Disneyland theme park at
marne-la_vallee.  The park was built 4460
acres of farmland. Planned to open early 1992.

There are many reasons for disneyland’s
failure;

-Environmental and Location Factors

-Labor Laws

-Competition

-Financing

-Cultural Differences

CULTURAL
DIFFERENCES

Hofstede’s
Cultural Dimensions Theory

It is the name of the frame used to measure the
level of intercultural communication of an entity, an institution, or an entity
that constitutes an asset in a social structure, and is referred to by Geert
Hosted for the first time. It can be said that the theory has been used by
different disciplines for many different purposes. For example, intercultural
social behaviors are used in different areas such as sociology, international
management and marketing, communication. In addition to all these, it is also
used to measure the extent to which people from many different cultures have
come together to work on social networks, how to navigate on the internet, or
how open a community is to different cultures.

Power
Distance Index

It questions the ideas of members of an
organization or social structure about power distribution and seeks to find
which of the two extremes is closer in the form of equal or unbalanced
distribution of power. The fact is that the ones who are close to the gentle
are defending the power equally, and the defenders of those who are not evenly
distributed the power are talking about the gentleness in the organizations.
From this point of view, it can be argued that the organizing culture is
developed in organizations with a close sense and that the democratic
atmosphere is more open. When examined at the cultural level, it is seen that
the close organizations are more open to different cultures.

There
are some of the main cultural differences between the United States and France.  United States the fairly low score on Power
Distance in combination with the most individualistic culture in the world. The
American premise of “liberty and justice for all.”. France scores fairly high
on Power Distance. Children are raised to be emotionally dependent, to a degree,
on their parents. This dependency will be transferred to teachers and later on
to superiors. It is, therefore, a society in which a fair degree of inequality
is accepted.  Power is not only
centralized in companies and government, but also geographically.

 

 

Individualism Vs Collectivism

Aggregation is used to measure how involved individuals
are. In societies where the concept of individuality is high, it can be said
that individual interests and goals are ahead of social interests and targets.
The fact that people feel themselves as a member of a group as an individual
forms the basic two extremes of the index. In terms of intercultural
flexibility, it can be said that the social organizations in which individuals
are regarded as individuals and whose concept of belonging is low is more open
to foreign cultures. US scores higher on Individualism. They just think of
their own family. France is shown to be an individualist society. Parents make
their children emotionally independent with regard to groups in which they
belong. This means that one is only supposed to take care of oneself and one’s
family.

Uncertainty avoidance

Indicator showing how pleasant a social organization is
towards uncertainty or ambiguity. The capacity to accept uncertainty is anxious
for any ambiguity in low societies, and it is expected that the rules or
solutions will be created that make every situation more specific. However, it
can be said that the cultural relations of the societies that accept the high
uncertainties are higher. These cultures are more open to change and have
higher levels of respect for new culture and new ideas.

The US scores well below average on the Uncertainty
Avoidance dimension. . As a consequence, the perceived context in which
Americans find themselves will impact their behavior more than if the culture
would have either scored higher or lower. France French culture scores high on
Uncertainty Avoidance. The French don’t like surprises. Structure and
planning are required.

Masculinity Vs Feminine 

The index that determines how the roles between the
sexes are emotionally distributed. In masculine societies, values are more
based on competition, power, and concrete objects. On the other hand, values in
feminine communities are based on relationships, quality of life and feelings.
In feminine societies, the gender of the woman or the man has no precaution and
is treated equally to the individual. In literature, the concepts of
“numerical life” (masculine) and “quality life (feminine)” are
used instead of “masculine” or “feminine” to disturb
readers from some communities or cultural backgrounds.

US on Masculinity are high. This can be seen in the
typical American behavioral patterns. This can be explained by the combination
of a high Masculinity drive together with the most individualistic drive in the
world. In other words, Americans, so to speak, all show their masculine drive
individually.

France has a somewhat feminine culture. At face value
this may be indicated by its famous welfare system (securité sociale), the
35-hour working week, five weeks of holidays per year and its focus on the
quality of life. French culture in terms of the model has, however, another
unique characteristic. The upper class scores feminine while the working class
scores masculine.

 

 

Uncertainty avoidance

Indicator showing how pleasant a social organization is
towards uncertainty or ambiguity. The capacity to accept uncertainty is anxious
for any ambiguity in low societies, and it is expected that the rules or
solutions will be created that make every situation more specific. However, it
can be said that the cultural relations of the societies that accept the high
uncertainties are higher. These cultures are more open to change and have
higher levels of respect for new culture and new ideas.

The US scores well below average on the Uncertainty
Avoidance dimension. As a consequence, the perceived context in which Americans
find themselves will impact their behavior more than if the culture would have
either scored higher or lower.

French culture scores high on Uncertainty Avoidance.
The French don’t like surprises. Structure and planning are required.

Pragmatism (long term orientation)

Confucian dynamism also means that the time horizons of
social organizations are questioned and measured according to whether social
organizations have long or short term expectations, goals or plans. Long-term
focused community units are more interested in making plans for the future and
their values are shaped according to these interests. For example, to save
money, to be permanent or to adapt for the sake of their interests. On the
other hand, it is possible to talk about short-term focused communities. The
values in those days are very much past and focused now. For example, respect
for the traditions from the past or the extent to which social responsibilities
are fulfilled are important.

US Americans are prone to analyze new information to
check whether it is true. Thus, the culture doesn’t make most Americans
pragmatic, but this should not be confused with the fact that Americans are
very practical, being reflected by the “can do” mentality mentioned above.

France in this dimension, making it pragmatic. In
societies with a pragmatic orientation, people believe that truth depends very
much on situation, context and time. They show an ability to adapt traditions
easily to changed conditions, a strong propensity to save and invest
thriftiness, and perseverance in achieving results.

Source: (COUNTRY COMPARISON, n.d.)

Trompenaars’ Research                 

Universalism versus Particularism- It talks about three major
differences: Universalistic cultures are focusing on the rules, but
Particularism cultures are focusing on relationships. Universalistic is only
one truth or reality, while Particularism is a number of perspectives on
reality. Universalistic people “treat all cases in the same way”, whereas in
Particularism people “treat cases on their special merits and create private
understandings”.

Based on above rules, it was believed that the rules,
regulations and policies are universal and can be applied anywhere without
modification. On the other hand French perceives distinct rules and regulations
as part of their culture. Motivated by the success of its three theme parks,
Disney did not realize that French were a part of a distinct culture and its
methods may not work there.

 

Individualism versus
Communitarianism:

There are three different points between Individualism
and Communitarianism in business decisions:  People are living in “a communitarian society”
in France while Americans are staying in the individual society. Lithe French
prefer to work together and take part in social relations mutually, whereas
people from the USA adore the individualism..It is normal phenomenon for
Americans to make ranks between bosses and employees; however, the French
people refuse it. In brief, the two prime dimensions could explain hardly the
ethics in different cultures.

Specific versus Diffuse: 

This dimension mentions two differences between the USA
and France

1. The USA’s culture is belonging to Explicit national
cultures, which make a decision with “a low context manner”; while France is
focusing on Implicit national cultures, which take a command with “a high
context manner”.

2. The USA pays attention to a negotiation clearly,
logically and persuasively, whereas France stresses on a discussion
inaccurately and indirectly.

Achievement versus Ascription:

This dimension mentions two differences between the USA
and France: “achievement versus ascription” and “doing versus being”. Americans
focus on “achievement” and “doing” in the culture of their country, such as
dividing their individualities from their jobs. In contrast, the French people
prefer to stress “ascription and being”. Moreover, they are not only attending
on “the highest esteem”, but also distinguishing features or ascribing to
the single. So, there is no doubt that the USA stress the bloodline of the
family and which school you graduated but the French emphasis the factors of
their history. This dimension measures the method through which social status
is accorded to a person. U.S. is certainly an achievement culture where a
person is regarded based on his achievement. Example: Walt Disney.

 

 

Euro Disneyland created an environment that was not
acceptable by the European culture itself.Cultural differences between the US
and France has been ignored by Disney. One of the themes of Euro-Disneyland was
American. Like other Disneyland in other places, Disney followed one of its two
major traditions of not serving wine, despite the attitude among the French
that alcohol was a fundamental right. And also restaurants were all American
foods. The only exception is Fantasyland which re-created European fables. The
recipes in American restaurants were also indistinctly adapted for European
tastes. As a consequence, different regional American food was introduced to
Americanize the Disneyland in Europe.

Cultural Operational Errors were a major problem for Euro
Disney; it affected Disney’s performance and attendance.Another error was the
breakfast in Euro Disney’s hotels, based on assumptions Disney downsized the
restaurants, because they assume that Europeans didn’t eat breakfast, when the
truth was that they ate. If Disney instead of decide to make assumption to base
their operations had research and tried to understand the Europeans preferences
(instead of trying to make them change their habits), Disney would fix those
problems even before the theme park was launched, it would increase customer
satisfaction.

Environmental
and Location Factors

As the park was being constructed,
Disney became concerned that the original plans, based on the Magic Kingdom in
California, were too spurious for this land of real castles, kings, and queens.
As a result, enhancements were ordered, and the park, originally budgeted at
$2.0 billion ended up costing $3.8 billion.This pushed Euro Disney’s break-even
parameters sharply higher, perhaps beyond its ability to deliver.

The nasty cold and rain between November and March
depressed attendance far below expectations. Disney seemed to have greatly
underestimated the importance of warm weather on winter attendance. Its Florida
and California experiences were not discounted enough, especially in winter.

Europeans take school much more seriously. They are far
less likely than Americans to pull their kids out of school for frivolous
reasons, like visiting a theme park. This further erodes Euro Disney
attendance, especially during the long 10-month period when schools are in
session.

 

 

MARKETING

There are some steps that any company should
contemplate before entering a new market in order to flourish. Unfortunately
for Euro Disney, those footsteps were not followed, instead Disney tried to
“force” the entry of its product (the theme park), and anticipated it to be
easy money. Market Analysis and Market Research are the first and most vital
steps that a company must take before entering a new market. Each country, each
city in the world has its own individualism, its own culture, and it is vital
to companies to appreciate the culture and the people they will deal with.
Disney lacked of accurate information about French culture and French
customer’s preferences, instead of doing a Market Research and learns from its
potential customers. If Disney would have done a proper Market Analysis and
Market Research they would have been able to anticipate many cultural
divergences they had.

In marketing the park Europe was treated as one country
when it has a larger range of language and culture than the US or Japan. While
the attempt was to give the park a European flavour, the advertising campaign
was typically American.  Most advertising
was aimed at children while the adults make the final decision on whether to go
or not. In America this may work because Disney theme parks are long
established and adults associate the whole experience with childhood memories.
In Europe however theme parks are un-established so more marketing effort is
required to convince people that Euro Disney will surpass everyones
expectations.

MANAGEMENT

The Management seem to be overpowered by their
reputation for success with no scepticism about the European market. The
opposition to Euro Disney was disregarded despite the fact that mainstream
newspapers seemed support the protest. Disney ignored the description of Euro
Disney as a cultural abomination, which could have highlighted the need for
further cultural integration. The attitude of Disney management is confidently dismissive
making them appear out of touch with the cultural differences.

There were reasons for failure due to marketing and
administration decisions made before and after the launch of the park. The
whole concept of trying to sell an American product to Europe, while trying to
adapt some features of the park to suit a wide variety of cultural tastes,
doomed the project. Overconfidence in the formerly foolproof Disney formula
meant that in planning the park not much attention was paid to many important
details. In this sense the administrative errors in the project planning were
the main reasons for failure. The inappropriate marketing of Euro Disney
contributed greatly to the poor attendance but ultimately the park itself was
not going to make the groundbreaking impression needed to create a new market.

Develop Alternatives

Disney was so blind by their success in Japan that they
didn’t stop to consider their previous experiences and how they need to adjust
them in order to better attend its French and European customers. Decision for
one Plan After developing several business scenarios and analyzing them Disney
should be able to select one, or make a combination with the best aspects of
all of them. Disney should have considered all uncontrollable forces that was
around them; for example French (as well as other European culture),
over-valued Franc due to recession. If a business plan was made considering all
of those factors, Disney would probably had more realistic numbers (attendance,
revenues) and should be able to deal with the cultural differences between
American and Europe, especially in France. Instead Disney chose a business plan
that underestimated the influence of cultural differences, and saw Disney’s
theme park as a monopoly due its quality and uniqueness. They just ignored and
didn’t give enough attention to the competitors offering different type of
entertainment. All those assumptions made Disney’s expectation way too high,
with overpriced admission fees, food and beverages, merchandise and with an
attendance too high.

Operational Plan

After gathering information about French and European
customers, their preferences, their culture, their age, their income, their
expectations, and to develop a business plan on how to run the business and
which scenario they think was the most accurate one, Disney should have
developed an effective operational plan. The Operational Plan should have
focused on, who will run the park? Who will be responsible for the staff? Who
will make the decisions? As Disney was entering in France and most of the
employees would be French or Europeans, the ideal was to put key French
managers, to deal with the staff, and probably a French chairman, as well as
human resources managers. Those managers would have more experience and
know-how, how to deal with the staff, with investors and executives, and with
the media, that could be a Disney’s marketing tool instead of an “attack base”.
Decision Making is something that most of the times should be taken quickly and
efficient, so those decisions should be taken in France, not on US as Disney
did. If Disney had these aspects they would probably have foreseen most of the
cultural and operational, problems that occurred and could have easily avoided
it.

CONCLUSIONS

The business performance of Euro Disneyland was not
that great and stable. It couldn’t have right assumptions on the European
market and there has been cruel European recession such as increase in interest
rates and French currency value. The preliminary plan was not ample and
accurate in providing resolutions to Disney problems and concerns that arisen.

 

A major criticism on Euro Disneyland was that it is
neither international nor French in nature, and it failed to satisfy Europeans
at all. Many of the visitors could not figure it out the theme of Euro
Disneyland that whether it is going to be a European park, an American park, or
a French park. In the meantime, the cost for Euro Disneyland was also an issue
for some visitors. Many of the French visitors had been discouraged from coming
because of the cost such as housing cost, souvenirs, admission cost and so
forth. Attendance was kept on decreasing and the company of course, had great
financial loss.

 

Euro Disney gave people who couldn’t afford to go to
America an identical experience as same as in America. However, the Euro Disney
was failed to please French visitors, even European visitors but made them to
complain about the long lines, and poor service.

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